France Backs Knot for ECB Leadership in Exchange for Chief Economist Role

France is backing Dutch central banker Klaas Knot to succeed Christine Lagarde as head of the European Central Bank (ECB), but only if the post of chief economist goes to a French candidate, according to sources.

The proposal has the support of French President Emmanuel Macron, and would likely involve appointing one of several French candidates to the chief economist role, including Agnes Benassy-Quere, Laurence Boone, or Helene Rey.

However, Germany is expected to resist this plan, as it would leave them with only Isabel Schnabel's vacated seat on the ECB board and her market operations portfolio. The German government also has its eye on the chief economist role.

The succession race at the ECB has gained momentum in recent weeks, amid speculation that Lagarde and Schnabel might both step down before their terms expire in late 2027. This would accelerate decisions due to be made next year and create conditions for a broad deal to fill their roles and that of chief economist Philip Lane.